The upheavals of the early 21st century have changed our world.
Now, in the aftermath of failed wars and economic disasters,
pressure for a social alternative can only grow

By Seumas Milne

October 19, 2012 "The
Guardian"
-- In the late summer of 2008, two events in
quick succession signalled the end of the New World Order. In
August, the US client state of
Georgia was crushed in a brief but bloody war after it
attacked Russian troops in the contested territory of South
Ossetia.

The former
Soviet republic was a favourite of Washington's
neoconservatives. Its authoritarian president had been lobbying
hard for Georgia to join Nato's eastward expansion. In an
unblinking inversion of reality, US vice-president Dick Cheney
denounced
Russia's response as an act of "aggression" that "must not
go unanswered". Fresh from unleashing a catastrophic war on
Iraq,
George Bush declared Russia's "invasion of a sovereign
state" to be "unacceptable in the 21st century".

As the
fighting ended, Bush warned Russia not to recognise South
Ossetia's independence. Russia did exactly that, while US
warships were reduced to sailing around the Black Sea. The
conflict marked an international turning point. The US's bluff
had been called, its military sway undermined by the war
on terror, Iraq and
Afghanistan. After two decades during which it bestrode the
world like a colossus, the years of uncontested US power were
over.

Three
weeks later, a second, still more far-reaching event threatened
the heart of the US-dominated global financial system. On 15
September, the credit crisis finally erupted in the collapse of
America's fourth-largest investment bank. The bankruptcy of
Lehman Brothers engulfed the western world in its deepest
economic crisis since the 1930s.

The first
decade of the 21st century shook the international order,
turning the received wisdom of the global elites on its head –
and 2008 was its watershed. With the end of the cold war, the
great political and economic questions had all been settled, we
were told. Liberal democracy and free-market capitalism had
triumphed. Socialism had been consigned to history. Political
controversy would now be confined to culture wars and
tax-and-spend trade-offs.

In 1990,
George Bush Senior had inaugurated a New World Order,
based on uncontested US military supremacy and western economic
dominance. This was to be a unipolar world without rivals.
Regional powers would bend the knee to the new worldwide
imperium. History itself, it was said, had come to an end.

But
between the attack on the Twin Towers and the fall of Lehman
Brothers, that global order had crumbled. Two factors were
crucial. By the end of a decade of continuous warfare, the US
had succeeded in exposing the limits, rather than the extent, of
its military power. And the neoliberal capitalist model that had
reigned supreme for a generation had crashed.

It was the
reaction of the US to 9/11 that broke the sense of invincibility
of the world's first truly global empire. The Bush
administration's wildly miscalculated response turned the
atrocities in New York and Washington into the most successful
terror attack in history.

Not only
did Bush's war fail on its own terms, spawning terrorists across
the world, while its campaign of killings, torture and
kidnapping discredited Western claims to be guardians of human
rights. But the US-British invasions of Afghanistan and Iraq
revealed the inability of the global behemoth to impose its will
on subject peoples prepared to fight back. That became a
strategic defeat for the US and its closest allies.

This
passing of the unipolar moment was the first of four decisive
changes that transformed the world – in some crucial ways for
the better. The second was the fallout from the crash of 2008
and the crisis of the western-dominated capitalist order it
unleashed, speeding up relative US decline.

This was a
crisis made in America and deepened by the vast cost of its
multiple wars. And its most devastating impact was on those
economies whose elites had bought most enthusiastically into the
neoliberal orthodoxy of deregulated financial markets and
unfettered corporate power.

A
voracious model of capitalism forced down the throats of the
world as the only way to run a modern economy, at a cost of
ballooning inequality and environmental degradation, had been
discredited – and only rescued from collapse by the greatest
state intervention in history. The baleful twins of
neoconservatism and neoliberalism had been tried and tested to
destruction.

The
failure of both accelerated the rise of
China, the third epoch-making change of the early 21st
century. Not only did the country's dramatic growth take
hundreds of millions out of poverty, but its state-driven
investment model rode out the west's slump, making a mockery of
market orthodoxy and creating a new centre of global power. That
increased the freedom of manoeuvre for smaller states.

China's
rise widened the space for the tide of progressive change that
swept Latin America – the fourth global advance. Across the
continent, socialist and social-democratic governments were
propelled to power, attacking economic and racial injustice,
building regional independence and taking back resources from
corporate control. Two decades after we had been assured there
could be no alternatives to neoliberal capitalism, Latin
Americans were creating them.

These
momentous changes came, of course, with huge costs and
qualifications. The US will remain the overwhelmingly dominant
military power for the foreseeable future; its partial defeats
in Iraq and Afghanistan were paid for in death and destruction
on a colossal scale; and multipolarity brings its own risks of
conflict. The neoliberal model was discredited, but governments
tried to refloat it through savage austerity programmes. China's
success was bought at a high price in inequality, civil rights
and environmental destruction. And Latin America's US-backed
elites remained determined to reverse the social gains, as they
succeeded in doing by violent coup in Honduras in 2009. Such
contradictions also beset the revolutionary upheaval that
engulfed the Arab world in 2010-11, sparking another shift of
global proportions.

By then,
Bush's war on terror had become such an embarrassment that
the US government had to change its name to "overseas
contingency operations". Iraq was almost universally
acknowledged to have been a disaster, Afghanistan a doomed
undertaking. But such chastened realism couldn't be further from
how these campaigns were regarded in the western mainstream when
they were first unleashed.

To return
to what was routinely said by British and US politicians and
their tame pundits in the aftermath of 9/11 is to be transported
into a parallel universe of toxic fantasy. Every effort was made
to discredit those who rejected the case for invasion and
occupation – and would before long be comprehensively
vindicated.

Michael
Gove, now a Tory cabinet minister, poured vitriol on the
Guardian for publishing a full debate on the attacks, denouncing
it as a "Prada-Meinhof gang" of "fifth columnists". Rupert
Murdoch's Sun damned those warning against war as "anti-American
propagandists of the fascist left". When the Taliban regime was
overthrown, Blair issued a triumphant condemnation of those
(myself included) who had opposed the invasion of Afghanistan
and war on terror. We had, he declared, "proved to be wrong".

A decade
later, few could still doubt that it was Blair's government that
had "proved to be wrong", with catastrophic consequences. The US
and its allies would fail to subdue Afghanistan,
critics predicted. The war on terror would itself spread
terrorism. Ripping up civil rights would have dire consequences
– and an occupation of Iraq would be a blood-drenched disaster.

The war
party's "experts", such as the former "viceroy of Bosnia" Paddy
Ashdown, derided warnings that invading Afghanistan would lead
to a "long-drawn-out guerrilla campaign" as "fanciful". More
than 10 years on, armed resistance was stronger than ever and
the war had become the longest in American history.

It was a
similar story in Iraq – though opposition had by then been given
voice by millions on the streets. Those who stood against the
invasion were still accused of being "appeasers". US defence
secretary Donald Rumsfeld predicted the war would last six days.
Most of the Anglo-American media expected resistance to collapse
in short order. They were entirely wrong.

A new
colonial-style occupation of Iraq would, I wrote in the first
week of invasion, "face determined guerrilla resistance long
after Saddam Hussein has gone" and the occupiers "be
driven out". British troops did indeed face unrelenting attacks
until they were forced out in 2009, as did US regular troops
until they were withdrawn in 2011.

But it
wasn't just on the war on terror that opponents of the New World
Order were shown to be right and its cheerleaders to be talking
calamitous nonsense. For 30 years, the west's elites insisted
that only deregulated markets, privatisation and low taxes
on the wealthy could deliver growth and prosperity.

Long
before 2008, the "free market" model had been under fierce
attack: neoliberalism was handing power to unaccountable banks
and corporations, anti-corporate globalisation campaigners
argued, fuelling poverty and social injustice and eviscerating
democracy – and was both economically and ecologically
unsustainable.

In
contrast to New Labour politicians who claimed "boom and bust"
to be a thing of the past, critics dismissed the idea that the
capitalist trade cycle could be abolished as absurd.
Deregulation, financialisation and the reckless promotion of
debt-fuelled speculation would, in fact, lead to crisis.

The large
majority of economists who predicted that the neoliberal model
was heading for breakdown were, of course, on the left. So while
in Britain the main political parties all backed "light-touch
regulation" of finance, its opponents had long argued that City
liberalisation threatened the wider economy.

Critics
warned that privatising public services would cost more, drive
down pay and conditions and fuel corruption. Which is exactly
what happened. And in the European Union, where corporate
privilege and market orthodoxy were embedded into treaty, the
result was ruinous. The combination of liberalised banking with
an undemocratic, lopsided and deflationary currency union that
critics (on both left and right in this case) had always argued
risked breaking apart was a disaster waiting to happen. The
crash then provided the trigger.

The case
against neoliberal capitalism had been overwhelmingly made on
the left, as had opposition to the US-led wars of invasion and
occupation. But it was strikingly slow to capitalise on its
vindication over the central controversies of the era. Hardly
surprising, perhaps, given the loss of confidence that flowed
from the left's 20th-century defeats – including in its own
social alternatives.

But
driving home the lessons of these disasters was essential if
they were not to be repeated. Even after Iraq and Afghanistan,
the war on terror was pursued in civilian-slaughtering drone
attacks from Pakistan to Somalia. The western powers played the
decisive role in the overthrow of the Libyan regime – acting in
the name of protecting civilians, who then died in their
thousands in a Nato-escalated civil war, while conflict-wracked
Syria was threatened with intervention and Iran with all-out
attack.

And while
neoliberalism had been discredited, western governments used the
crisis to try to entrench it. Not only were jobs, pay and
benefits cut as never before, but privatisation was extended
still further. Being right was, of course, never going to be
enough. What was needed was political and social pressure strong
enough to turn the tables of power.

Revulsion
against a discredited elite and its failed social and economic
project steadily deepened after 2008. As the burden of the
crisis was loaded on to the majority, the spread of protests,
strikes and electoral upheavals demonstrated that pressure for
real change had only just begun. Rejection of corporate power
and greed had become the common sense of the age.

The
historian Eric Hobsbawm described the crash of 2008 as a "sort
of right-wing equivalent to the fall of the Berlin wall". It was
commonly objected that after the implosion of communism and
traditional social democracy, the left had no systemic
alternative to offer. But no model ever came pre-cooked. All of
them, from Soviet power and the Keynesian welfare state to
Thatcherite-Reaganite neoliberalism, grew out of ideologically
driven improvisation in specific historical circumstances.

The same
would be true in the aftermath of the crisis of the neoliberal
order, as the need to reconstruct a broken economy on a more
democratic, egalitarian and rational basis began to dictate the
shape of a sustainable alternative. Both the economic and
ecological crisis demanded social ownership, public intervention
and a shift of wealth and power. Real life was pushing in the
direction of progressive solutions.

The
upheavals of the first years of the 21st century opened up the
possibility of a new kind of global order, and of genuine social
and economic change. As communists learned in 1989, and
the champions of capitalism discovered 20 years later, nothing
is ever settled.

This is an edited extract from The Revenge of History: the
Battle for the 21st Century by Seumas Milne, published by Verso.
Buy it for £16 at guardianbookshop.co.uk

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